Kerry Group shares rise almost 3% on earnings outlook

Kerry Group’s shares jumped by nearly 3% after the nutrition and food group reaffirmed its full-year earnings guidance on the back of a strong nine-month performance.

The Tralee, Co Kerry-based group said it expects to meet its previously-stated target of achieving 7% to 9% growth in adjusted earnings per share, on a constant currency basis for 2019 after seeing revenues rise 10% in the first nine months of the year.

Kerry saw near 4% sales volume growth in its key taste and nutrition division in the nine months, with solid gains seen in both the Americas and Europe. The consumer foods arm saw a near 1% drop in sales volume, but Kerry said the ‘food-to-go’ element of the division performed well.

“We are pleased with our performance to date in the period, with volume growth ahead of our markets combined with margin expansion,” said group chief executive Edmond Scanlon.

“We enjoyed strong growth in developing markets as we further deploy our technology and continue our strategic footprint expansion. We continued to make strategic acquisitions, and good progress has been made on the integration of acquisitions completed over the last 12 months which are performing well,” he said.

Kerry’s shares have now gained around 25% in value in the last year. That is in stark contrast to rival Glanbia, whose share value has tanked by more than 28% over the same period. Last week Glanbia’s shares tumbled as the dairy and nutrition group said it is continuing to face challenges with its sports nutrition business in key international markets. In its latest trading update Kerry also said its net debt stood at €2bn as of the end of September. “The group’s balance sheet remains strong, which will facilitate the continued organic and acquisitive growth of group business,” it said.

“Once again, Kerry has continued to deliver volume growth ahead of underlying markets, with its taste and nutrition division remaining the key driver of growth,” said Goodbody analyst Jason Molins.